340-904 thrust bearing/crank issue

It is also very possible that the crank grinder "banged" the thrust making it too loose on the previous build, and got gradually worse.
I normally try to use the larger flanged thrust bearing (there are 2 diff flange sizes) and file a small "channel" on the end of the bearing where the halves meet, from the groove to the rear thrust surface, just for a little more oil.
If the convertor didnt have balloon plates and got hit with a healthy shot of n2o that will deff do it to.
You may want a convertor shop to inspect it. They swell when they get too much power for their rating, then shrink back down when they cool off. Can be hard for an untrained eye to determine if there is a prob.